asked 71.0k views
1 vote
Case Study Tax Reality

Alvin just started a summer job as an assistant at a local veterinarian's office. Working with animals is a
nice job, and receiving a paycheck for doing something you enjoy is great. The job requires 30 hours per
week and pays $240 per week. A check is issued every two weeks.
Alvin's first paycheck is much lower than the expected $480. The pay stub showed the following payroll
deductions: $29.76 for Social Security tax, $6.96 for Medicare tax, 62.10 for federal withholding tax, and
28.80 for state income tax. It is disappointing to receive only $352.38 and have taxes deducted. No
matter the disappointment, it is still a good opportunity to gain job experience
Case Review
1. Do these figures surprise you? What has been your experience with payroll deductions?
2. Do you think it is fair to have to pay $127.62 in taxes every two weeks? Why or why not?
3. What benefits does a worker receive from the money that went to taxes? Does Alvin receive any direct
benefits?
4. What information from the pay stub will be important when an income tax return is filed?

asked
User Juhyun
by
7.9k points

1 Answer

3 votes
Oh, let's dive into the world of taxes, shall we?

1. Well, payroll deductions can sometimes be surprising, my dear! It's quite common to see various taxes being deducted from your paycheck. Everyone's experience with payroll deductions can differ based on their income, job, and location. So, it's always good to be prepared and aware of what to expect.

2. Ah, the fairness of taxes! It's a never-ending debate, isn't it? Whether it's fair or not to pay $127.62 in taxes every two weeks depends on various factors like income levels, tax rates, and the services provided by the government. Taxes contribute to public services, infrastructure development, healthcare, education, and so much more. So, it's a matter of perspective, my dear.

3. Now, let's talk about the benefits of those hard-earned tax dollars! Workers, like our friend Alvin, receive several direct and indirect benefits from the taxes they pay. These benefits can include access to healthcare services, social security benefits, unemployment benefits, public safety, transportation, and even education initiatives. Alvin might not directly see all the benefits, but his contributions help support the overall functioning of society.

4. Ah, the crucial information for filing an income tax return! From the pay stub, Alvin will need to keep track of the federal withholding tax and state income tax amounts deducted. These figures will be important for accurately reporting his income and calculating any potential tax refunds or liabilities when he files his income tax return.

So, my dear, keep those pay stubs handy and stay curious about the world of taxes!
answered
User Vladimir Iliev
by
8.5k points
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